The perennial search for quick money takes us through lot of unknown routes. And for people who are not from this industry the shorter paths look far more promising. So if somebody suggests a flower exporter or a speciality hotelier the chances are we fall for it.
Think hard how much money can these companies make? and how much of your money will you have the guts to put into such companies?
It takes a lot of hard work, luck, government lobbying, team building – to create companies like Tata Steel, Hdfc, TCS, Infosys, Reliance, Honda Motors. It takes years, if not decades to create good companies too!
However a few people feel (and they are fed such nonsense by the ads) – pick up a penny stock (also called micro cap) – and it will double in a few months. One ad about which I had written about earlier gives you a game plan by which your US $ 200 becomes a few million – and how you do not need a Retirement Plan at all!
Only if life were so simple! Alas, it is not so. Not so at all!
Cheap stocks – by whatever name called are cheap because:
– NOBODY IS BUYING THEM!
– NOBODY ELSE IS talking to those companies, analysts do not track it, responsible media does not know about them, their boards are unknown,….
-NOBODY IS interested in them! – these are companies which are so small that it does not excite big investors, mutual funds, life insurance companies, etc.
Leave such companies to the big people – let the Enams, JM, Dsp, Kotaks of the world invest in such companies.
If you do not know how to manage your money, being a Venture capitalist is not a great idea, what say?
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